Nokia CEO Rajeev Suri has revealed why the telecom network maker is betting big on 5G business at a time when rival Huawei is struggling to win 5G network deals.
Finland-based Nokia, which is trying to cash in on the crisis faced by Huawei, said it will show its progress in driving 5G product cost reductions.
The 5G product shipments — 5G Powered by ReefShark – account for nearly 10 percent of its total 5G product shipments in the fourth quarter 2019. Nokia expects that percentage will rise to more than 35 percent in 2020 and 70 percent in 2021.
Nokia has also disclosed its 5G win rate. This metric factors in customer size and measures how Nokia is doing in converting 4G footprint, as well as adding new 5G footprint where it did not previously have a 4G installed base. Nokia’s 5G win rate was over 100 percent outside of China and in the mid 90 percent range including China at the end of the fourth quarter 2019.
Nokia said its 4G plus 5G mobile radio market share, excluding China, was approximately 27 percent in the fourth quarter 2019. Nokia aims to have approximately 27 percent share in 4G plus 5G mobile radio market in 2020. Nokia did not include China, given that pursuing market share in China presents significant profitability challenges and the region has some unique market dynamics.
Nokia has claimed it has won 66 commercial 5G network deals. Nokia is also behind 19 live networks in 5G space.
Nokia reported revenue of 6,903 million euros in Q4 vs 6,869 million and 23,315 million euros in 2019 vs 22,563 million euros.
Nokia generated revenue of 5,439 million euros from network business, 870 million euros from software business and 376 million euros from technology business during the fourth quarter of 2019.
China sales drop
Nokia felt the music in China despite China Mobile, China Telecom and China Unicom have decided to accelerate their roll out of 5G network across the country. Nokia has also lost business in North American in the wake of the slow progress in the $26 billion merger between T-Mobile and Sprint.
Nokia generated revenue of 1,383 million euros (+16 percent) from Asia Pacific, 1,895 million euros (–1 percent) from Europe, 469 million euros (–25 percent) from Greater China, 467 million euros (+3 percent) from Latin America, 619 million euros (+10 percent) from Middle East and Africa and 2,070 million euros (–3 percent) from North America in Q4 2019.